how much cash in cash drawer
When managing a business, one of the most overlooked yet crucial aspects of daily operations is determining how much cash should be kept in the cash drawer. Whether it’s a small retail store, a busy restaurant, or a large-scale supermarket, the cash drawer serves as the central hub for daily transactions. Understanding the ideal amount of starting cash and how to maintain it throughout the business day can improve efficiency, accountability, and customer satisfaction. Having the right balance of coins and bills on hand is key to making change quickly, avoiding shortages, and preventing theft.
What Is a Cash Drawer?
A cash drawer is a secured compartment that holds the physical cash used during business transactions. It is typically part of a point-of-sale (POS) system and is designed to open only when a transaction is completed or under authorized access. Inside, it contains compartments for coins and various denominations of paper currency.
Functions of a Cash Drawer
- Holding cash for transactions
- Storing checks or receipts temporarily
- Allowing for easy access and secure storage of money
- Supporting daily reconciliation and auditing
How Much Cash Should Be in the Drawer?
The amount of cash kept in the drawer depends on several factors, including the type of business, expected volume of sales, average transaction size, and the forms of payment accepted. In general, businesses maintain a ‘cash float’ or ’till float’ a predetermined amount of money available at the beginning of a business day for giving change.
Average Starting Cash Float
For small to medium-sized businesses, the average starting cash in the drawer ranges from$100 to $300. Larger establishments may start with $500 or more, especially if they expect high volumes of cash transactions.
Recommended Denomination Breakdown
A balanced mix of bills and coins helps ensure change can be made quickly for various transaction amounts. Here’s a sample breakdown for a $200 starting float:
- $1 bills $50 (50 x $1)
- $5 bills $50 (10 x $5)
- $10 bills $40 (4 x $10)
- $20 bills $40 (2 x $20)
- Coins $20 (in quarters, dimes, nickels, and pennies)
Factors That Influence Cash Drawer Amounts
Type of Business
Businesses that deal heavily in cash, like diners or convenience stores, often keep more in the cash drawer compared to boutiques or service-based businesses that rely more on card payments.
Transaction Size
Stores with high-ticket items may need less small change but more higher denomination bills. Meanwhile, a coffee shop with many low-dollar sales requires more coins and $1 bills.
Business Hours
Extended business hours might require more starting cash to sustain operations throughout the day, especially if there are fewer opportunities to replenish the drawer.
Location and Security
In high-risk areas, businesses may minimize the cash kept in drawers and make frequent bank deposits to reduce theft or robbery risk.
Best Practices for Managing Cash Drawers
Establish a Set Float
Have a fixed amount of cash to start each day. This makes it easier to balance the drawer at closing time and identify any discrepancies.
Regular Cash Drops
Remove excess cash from the drawer throughout the day, especially during peak hours. Store it in a safe or deposit it to avoid holding too much at once.
Train Employees
Ensure all employees handling cash are trained in correct cash handling, making change accurately, and how to report any issues or shortages.
Use a POS System
Modern POS systems help track every cash transaction, allowing for easy monitoring and reconciliation at the end of the day.
Daily Cash Drawer Reconciliation
At the end of each business day, it’s important to count the money in the cash drawer and reconcile it against the POS system’s transaction log. This helps detect any overages, shortages, or suspicious activity.
Steps for Reconciliation
- Remove and count all cash from the drawer
- Separate the float amount to be used the next day
- Compare total sales to the actual cash received
- Document any discrepancies and investigate if needed
- Deposit the excess cash as needed
Preventing Theft and Loss
Limit Access
Only authorized personnel should be able to access the cash drawer. Use keys, PINs, or biometric systems to restrict entry.
Monitor Activity
Security cameras aimed at the register can discourage theft. Also, review POS logs for unusual patterns such as excessive refunds or voids.
Count Cash with Two People
For added accountability, have two employees present during the opening and closing cash counts.
Adjusting the Float as Needed
The starting cash amount in the drawer should not remain static forever. Business trends change, and cash usage might decrease over time as card payments and digital wallets become more popular. Periodically evaluate how much cash is actually needed to ensure operations run smoothly without tying up too much money in the till.
When to Adjust
- If you consistently run out of change mid-day
- If the drawer has large surpluses that sit idle
- When opening new locations with different sales volumes
So, how much cash should be in the cash drawer? The answer depends on the unique needs of your business, but a well-thought-out starting float between $100 and $300 is typical. Maintaining the right amount ensures quick customer service, accurate change-making, and financial accountability. By using best practices, including cash drops, staff training, and regular reconciliation, you can manage your cash drawer effectively and reduce the risk of errors or losses. Keeping your cash drawer organized and well-stocked is a small but significant step toward operational excellence in retail and hospitality settings.